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August 4, 2013

Top Portfolio Products: New Income Indexes for Pre-Retirees From BlackRock

Plus, Fidelity to launch 10 ETFs with BlackRock as subadvisor, and American Century introduces retirement share class

New products introduced over the last week include new income indexes from BlackRock designed for pre-retirees; Fidelity’s planned new ETFs that will be subadvised by BlackRock; a new China Internet ETF from Krane Funds; and a new retirement share class for many of American Century’s funds.

In addition, Guggenheim Investments changed the index followed by its Canadian Energy Income ETF; Northern Lights Distributors launched a new educational series for advisors; and Sammons Retirement Solutions added an array of new investment options, as well as new fund managers, to its LiveWell Retirement Series products.

Here are the latest developments of interest to advisors:

1) BlackRock Introduces Income Indexes for Pre-Retirees

BlackRock Inc., the world’s largest asset manager, announced Wednesday that it is launching a series of indexes that let advisors and their older clients calculate how much annual income they will need in retirement as well as the level of savings they will need to reach their retirement income goals.

At the same time, BlackRock also is filing prospectuses for bond funds linked to the index, with the intention of offering the funds for use within its existing target date funds.

The BlackRockCoRI Retirement Index series was developed to help investors age 55 and older plan for retirement by tracking the estimated cost of $1 of future, annual inflation-adjusted lifetime income beginning at age 65.

Fidelity Investments has announced that it plans to launch 10 sector-specific ETFs that will be subadvised by BlackRock. Known more for its actively managed mutual funds, Fidelity seeks BlackRock’s expertise in passively managed products to bring its new ETFs to market more quickly than it might otherwise have been able to.

Fidelity has registered the 10 new ETFs, which have not yet been approved by the SEC, in a preliminary prospectus on Friday. The ETFs offer exposure to sectors such as financials, consumer staples and discretionary, energy, telecommunications, utilities, healthcare, industrials, materials and IT.

3) KraneShares Launches China Internet ETF

Krane Funds Advisors LLC announced Thursday the launch of KraneShares CSI China Internet ETF (KWEB), which provides exposure to Chinese Internet and Internet-related companies. According to a McKinsey & Co. report, China e-tailing accounted for $190 billion in sales in 2012 and could reach as much as $650 billion by 2020.

American Century Investments announced Wednesday that it has completed the addition of a new retirement plan share class to many of its most popular mutual funds, as well as 10 new target date funds. A total of 41 fund strategies now have the R6 share class, the lowest total expense ratio of any share class offered by the firm. The move was specifically designed to underscore the firm’s commitment to clients and prospects in the defined contribution plan marketplace.

The R6 class shares are generally available only through employer-sponsored retirement plans where a financial intermediary provides retirement recordkeeping services to plan participants.

5) Guggenheim Investments Changes Index for Canadian Energy Income ETF

Guggenheim Investments, the investment management division of Guggenheim Partners, announced Thursday that Guggenheim Canadian Energy Income ETF (ENY) has changed its benchmark index to the S&P/TSX Canadian High Income Energy Index. ENY, which previously tracked the Sustainable Canadian Energy Income Index, is the only ETF to offer exclusive exposure to the Canadian energy market.

The S&P/TSX Canadian High Income Energy Index is designed to provide exposure to high-yielding securities in the Canadian energy sector that meet size and liquidity requirements.

Northern Lights Distributors, LLC announced Tuesday the upcoming launch of an educational series to provide advisors with information detailing each step of the mutual fund distribution process.

The four components of mutual fund distribution—sales, key accounts, portfolio and executive management and marketing and public relations—are explained in the first educational report in the series, which also includes videos and other multimedia materials. All resources will be posted on the “Distribution 101” section of its website, www.nldistributors.com, launching later this year.

Sammons Retirement Solutions Inc. announced Thursday that it has added new equity, bond and alternative investment options to its LiveWell Retirement Series of mutual fund IRAs and variable annuities. The additions, 36 mutual funds, 8 VA investment options and 4 fund companies, bolster existing offerings in key sectors like balanced equity/bond and high-yield bonds while opening access to gold and real estate options.

Sammons has added 36 new mutual funds to the two LiveWell Mutual Fund IRA Series offerings and eight investment options to the LiveWell Variable Annuity. Along with the funds, Sammons has introduced four new fund companies—Columbia Management, First Investors, Pax World and Transamerica—to its multimanager IRA platform. Columbia Management and First Investors have also been added to the VA offering.